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Student Loan Default Options 

Students who are in student loan default “may” have the following options available to be reconsidered for financial aid. (Please confirm options with the holder of the loan).

1. Obtain a loan from a personal banking institution to pay off loan default.

2. Default Rehabilitation Program: Consolidate loan balance into a ten-year period. After one year of timely payments, the default status will be removed (only one default rehabilitation permitted). **

3. Income Sensitive Program: Students are to provide documents why the client is unable to make recommended monthly loan payments. With documentation, it can be lowered for one year. After one year, it will however resume to the original monthly amount.

4. All guaranty agencies and the U.S. Department of Education (Department) will accept regular monthly payments that are both reasonable to the agency and affordable to you. Call 1-800-621-3115 and speak to a customer service representative.

** Commonly, after six months of successful payments on programs #2 or #3, individuals can apply and be reconsidered for other financial aid consideration (the required number of successful months could vary from lender services). Also, go to regarding loan repayment, consolidation, default, disputes, etc.